As President Hasan Rouhani prepares to address the UN General Assembly in New York and the Trump administration and allies relentlessly lobby for the Iran nuclear deal to be decertified, Tehran is busy clinching deal after deal with Asians and Europeans.
For the Chinese government, Iran – and Pakistan – are so geopolitically important that they are treated as Home Affairs nations in East Asia (and not the Middle East, in the case of Iran), alongside Japan and Indonesia.
And just like Pakistan via the China-Pakistan Economic Corridor (CPEC), Iran is an essential node of the New Silk Roads, a.k.a. Belt and Road Initiative (BRI).
For Tehran, Beijing is a major player in international trade/finance. At the Belt and Road forum in Beijing in May, Iran’s Economic Affairs and Finance Minister Ali Tayyebnia extensively discussed deals with Chinese Finance Minister Xiao Jie. Chinese companies in construction and energy infrastructure equipment – as well as in steel and chemicals – are present all over Iran.
Enter the deal just signed between China’s CITIC and a consortium of Iranian banks worth $10 billion in loans.
Enter as well a BRI-related railway modernization drive, with Beijing providing $1.5 billion to electrify the Tehran-Mashhad trunk line, and another $1.8 billion for a high-speed rail linking Tehran, Qom and Isfahan.
These upgrades fit into two BRI vectors; to increase China’s trade/connectivity not only with Iran – all the way to the port of Bandar Abbas near the Strait of Hormuz – but also with Turkey. Freight trains ideally should be running non-stop between Xinjiang and Istanbul as early as 2020.
That should be no mean achievement. Iran is the key connectivity link in routes through both Central Asia and the Caucasus. A key proposed route runs from Xinjiang to Kyrgyzstan, Tajikistan, Uzbekistan, Turkmenistan, Iran and southeast Turkey. China South Corporation (CSR) – the world’s largest manufacturer of locomotives – expects the whole finished high-speed rail link to cost around $150 billion.
All aboard the investment train
Austria, Denmark and Italy, as well as Japan, are about to clinch as much as $30 billion in deals with Iran. Europeans are back in the Iranian market with a bang. Mercedes-Benz has signed a contract with Iran Khodro to distribute its trucks.
Ha Yung-ku, chairman of the Korea Federation of Banks (KFB), and Kourosh Parvizian, head of Iran’s Association of Private Banks (IAPB), signed a banking deal that – crucially – expands trade in their own currencies, bypassing the US dollar.
And then there’s movement in another transport corridor essential to landlocked Central Asia – and especially Afghanistan, at the intersection of Central and South Asia; the port of Chabahar.
Chabahar is the centerpiece of India’s Southern Silk Road – with a maritime component via the Indian Ocean linked to an overland branch all the way to Afghanistan. There’s fierce discussion about exactly how much the state-owned India Ports Global Limited (IPGL) invested in the development of Chabahar – the port as well as associated roads and railways. That ranges from $500 million (the Indian version) to only $85 million, according to an Iranian firm, Aria Banader, which states to have invested as much as $403 million.
Indian officials have already promised Afghan counterparts that wheat transported out of Chabahar should be supplying Afghanistan in a matter of weeks.
Complementing this connectivity frenzy some room may be opening for a certified game-changer; a navigable canal between the Caspian Sea and the Persian Gulf.
There are two potential routes for what is known as “Iran rud” (“Iran’s River”), stretching between 765km to 1,400km, and costing between $6 billion and $10 billion, according to Iranian estimates made four years ago.
Even considering the difference in sea level height, technically the canal can be built. The problem, besides cost, is that it might take roughly 10 years to finish. Iran, China and Russia (because of the access by Russian ships to the Indian Ocean bypassing the Bosporus and the Dardanelles), not by accident the three major poles of Eurasia integration, are interested.
This is a classic project that may gain impulse – perhaps under the umbrella of the Asia Infrastructure Investment Bank (AIIB) – as the interpolation of BRI with the Eurasia Economic Union (EAEU) gathers pace alongside the International North-South Transport Corridor (INSTC) of which Iran, India and Russia are members. Once again; it’s all about Eurasia integration.
What about our “global economic embargo”?
Now compare all this trade/investment/connectivity drive with the CIA once again obsessed with – what else – regime change in Tehran.
Or a document currently circulating on Capitol Hill and in the White House stating President Trump should declare to Congress next month not only that the Iran nuclear deal is no longer in the national security interest of the United States, but also hit Tehran with a “de-facto global economic embargo”.
Following a meeting with President Putin in Sochi this past Wednesday, Iranian Foreign Minister Javad Zarif went straight to the point; the (multilateral) nuclear deal is non-negotiable.
There’s no way the “RC” in BRICS – the Russian-China strategic partnership – as well as the Europeans involved in the Vienna negotiations (UK, France and Germany) will throw away the Joint Comprehensive Plan of Action (JCPOA).
Any possible, further, unilateral US sanctions simply would not be followed by all the other members of the P5+1 negotiating team. Europeans and Asians will continue to invest in Iran. China, India, Japan and South Korea will continue to buy Iranian oil and gas – paying for it in their own currencies or making swap deals.
But then we have Return of the Living Dead neocons casually floating the notion that the US “may need to go it alone in a conventional conflict.” Good luck with that, and with the “global economic embargo”.
Does anyone actually still believe US foreign policy in the Middle East has been formulated in Washington for the last 7 decades? America’s "allies and partners in the Middle East" are itching to fight Iran to the last drop of American blood, and they’re about to get their wish through the gullibility of Americans living in their Fox News bubble of alternative facts.
Persia is the home of strategy. Interesting to see how Iran charged the region into taking a stand against global hegemony.
Iranians have the potential to do great things in the future, like they did in the past.
Americans don’t even abide by Iran nuclear deal much less talking to Koreans. The orange head nut case is surrounded by clueless generals and Zionist war mongers. In other words, the have their head buried in their assets and completely clueless.
USA has finally done it. It is now fully discredited & left behind, while the world advances. Those who promote destruction inevitably end up destroying themselves.
American foreign policy has been formed on Wall St. ever since the end of WWII.
Laurie Zanardelli I’m sorry but you’re wrong it only touches Wall Street in so much as it has to do with Israel and its connections to Wall Street. It’s foreign policy is all wrapped around the preservation of Israel to the immense detriment to the United States and its people’s best interest. The creation of Israel as a state must be considered one of the biggest mistakes the world community has ever allowed to take place. There are many religions around the world that do not demand a state of Their Own. The Jews around the world would not be ostracized if they did not continue to control the economies of the state they lived in and relinquished the idea of being chosen buy a Supreme Being. And I might add the same is true of that of the Muslim faith and many Christian faiths as well if not all. Damn! How
I wish we would all grow up and become human beings. It is such childish nonsense to think ourselves exceptional, preordained by Birth or Country.
Common Sense would dictate that the US stop it’s provocative military drills off North Korea’s Coast and stop all sanctions all together. North Korea just wants to exist and it should be allowed to. It is the US who is in the wrong. The example of Libya’s Muammar Gaddafi should be evidence enough never to trust the United States and give up your weapons. Only a true idiot would fall for that ruse again. We have no problems living with communist China and we’re quite successful living with the Soviet Union. As well as they should let Iran have the bomb everybody should have one. Perhaps then the US would stop being the bully of the world.
Uncle Sam, the lonely old drunk vomiting all over himself at the wedding reception, once again shows how irrelevant he is to the planet. He thinks he’s still a stud, the rooster and the bull. Many snicker at him behind his back, and many others, right to his face. He’s too wasted to care one way or another, still stoned on those long past glory days when his opinion counted. Most are just waiting for him to pass away, a fate most can foresee without requiring a crystal ball.
Laurie Zanardelli spotos onos!
Very succint and delightful comment bro. Well done !
John Davis – The event which IMHO is going to be a game-changer in the future is an event that happened 50 years ago – Israel’s attack on the USS Liberty – Once this event is known about by the US public ( most are still blissfully ignorant of it ) , it may be game over for Israel.